Joe discusses how to keep the auditors at bay.
Monthly Archives: January 2014
Why IRS customer service is awful (and may get worse)
If you have a question about your taxes, here’s a tip: Be prepared to be very patient.
MARKET WEEK: JANUARY 27, 2014
A double whammy helped trigger a selloff in equities last week. Weaker-than-expected manufacturing data from China helped fuel concerns about the global impact of potential additional Fed tightening next week and a stronger U.S. dollar. Some lackluster earnings reports didn’t help, though profit-taking in the wake of last year’s strong rally also could have been a factor. After declines in several emerging-market currencies, the Dow and S&P 500 dropped below their 50-day moving averages; the Dow lost 318 points on Friday alone. The Nasdaq, the small caps of the Russell 2000, and the Global Dow joined them in negative territory for the year. The global jitters had investors seeking the relative safety of Treasury bonds as the benchmark 10-year yield fell for the fourth straight week.
How to keep the IRS auditors at bay
It’s tax preparation time again, which means it’s time to collect your records and hope for the best. it’s also a time when taxpayers quake at the thought of a potential audit.
The good news is your odds of being audited are low: In 2012, the latest year for which the IRS has released data, just 1 percent of all taxpayers were audited. And really, honest taxpayers have nothing to fear but inconvenience from an audit.
“To me, the real question is not how do I avoid an audit but how do I make sure I’m ready for an audit,” said Jackie Perlman, principal tax research analyst at H&R Block’s Tax Institute.
Still, it’s worth knowing what elements in your filing might catch the eye of the IRS. This year, there are some long-standing potential triggers, but also some new ones.
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MARKET WEEK: JANUARY 21, 2014
Domestic indices were mixed last week. The Nasdaq and Russell 2000 ended with slight gains, the Dow was basically flat, and the S&P 500 wound up with a slight loss after briefly returning to the level at which it started the year. The benchmark 10-year Treasury yield also saw a little dip.
ANNUAL MARKET REVIEW 2013
Standoffs, sequestration, shutdown, and suspense in Washington supplied the wall of worry that equities markets are said to be so fond of climbing. And climb it they did. The Dow, S&P 500, and small-cap Russell 2000 explored record territory for much of the year. Investors spent most of 2013 toggling between rejoicing at the lack of bad economic news and worrying that good news would prompt the Federal Reserve to start cutting its support. However, the Fed delayed action, first to assess the economic impact of the sequester budget cuts imposed by 2012’s fiscal-cliff detour, and then to avoid aggravating concerns over the U.S. debt ceiling showdown and the 16-day government shutdown.
All the uncertainty rattled markets worldwide, particularly emerging markets, during the summer. However, headlines about potential sovereign default abroad became more scarce as the eurozone emerged from the longest recession in its history despite record 12% unemployment. Meanwhile, China announced plans for economic reforms designed to reduce state monopolies and open up the banking system. In the United States, regulators finally adopted the Volcker rule, which will limit Wall Street banks’ ability to speculate with their own money, and Janet Yellen prepared to replace Ben Bernanke as Fed chairman. Meanwhile, despite the confusion in Washington, solid corporate profits helped reassure investors.
By year’s end, the S&P 500 had nearly tripled since its March 2009 low. However, financial markets must now begin navigating unfamiliar terrain as the Fed begins to taper its support. With a fresh round of debt ceiling debates on the horizon, that wall of worry isn’t likely to shrink in 2014; the question is whether investors will be willing to climb it–and if they are, how far they might go.
How Scammers Steal Your Tax Return
Everyone knows that not paying your taxes can get you into trouble with Uncle Same. But it turns out, the same is true if you do pay your taxes.
In the past three years, tax identity fraud has skyrocketed. According to attorney Steve Poporoff of the Federal Trade Commission, complaints about this relatively new crime have tripled since 2010. In fact, last year they made up almost half (44%) of the total number of consumer complaints the commission received.
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MARKET WEEK: JANUARY 13, 2014
Believers in the so-called January indicator–the concept that the first five trading days suggest the stock market’s overall direction for the rest of the year–were likely discouraged last week. The S&P gave up roughly half a percentage point during 2014’s first five trading days. The other three domestic indices also slipped during those five days, with losses ranging from the Nasdaq’s quarter of a percentage point to the Dow’s nearly seven-tenths of a percent. A rebound at week’s end gave three of the four domestic indices a gain for the week. However, the small-cap Russell 2000 was the only index to see gains for both the week and the year so far. Meanwhile, the yield on the benchmark 10-year Treasury fell as the new year saw a new interest in bonds.